Sunday, September 16, 2012

Government ignores Goodhart's law again

Goodhart's law expresses one of those insights to human behavior that we see play out again and again and increasing so in medical care as the farce of P4P expands in spite of all evidence indicating its negative effects. According to Charles Goodhart - When a measure become a target it looses its value as a measure.

History is replete with examples of Goodhart's law.The targets of various Soviet industrial centrally planned programs,the cash for clunkers program and high school teachers teaching to the test are just some of the many.The economist,David Henderson, wrote this excellent essay on Goodhart's law and the GDP .

See here for this Forbes article by Dr. Paul Hsieh for how we will see that story again with tragic results with the new Medicare rule about re-admission to hospital within 3o days for patients with certain medical conditions.The debacle of the four hour pneumonia rule seemingly taught the Medicare hierarchy absolutely nothing.See here. Similarly targeting wait times in British NHS hospital had deleterious results predictable from Goodhart' s law.See here for my earlier comments

So many factors outside of the hospital's control and the treating physician's control influence likelihood of a patient's condition exacerbating and necessitating readmission that considering readmission rate as a quality measure at all is absurd on its face.But whether the proposed measure is a valid measure or not does not matter, there will be unintended consequences.

People respond to incentives which can be positive or negative. If someone is penalized economically for not reaching a target or rewarded economically for reaching one, either way the person 'Teaches to the test".